New York State lawmakers have finally acted to pass a law that will heavily fine Airbnb hosts, and those using other short-term rental sites, for listing rentals that violate the state’s short-term rental laws.
The new law will ban, or heavily restrict, the advertising of full-unit rentals in New York City that are let for terms of less than 30 days. City authorities in New York, and in another cities, feel short-term rentals like that are cutting into regular home accommodation available for residents, and are unfairly taking business from hotels and hostels.
The new law bans such short-term rentals if residents are not present, although posting listings for such rentals is not explicitly barred. The new law imposes a penalty of up to USD 1000 for the first violation, USD 5000 for the second violation, and USD 7500 for the third and subsequent violations.
Short-term rentals are already illegal under New York’s short-term dwelling law. Short-term rentals make up most of Airbnb’s inventory, so Airbnb – founded in 2008 and valued at over AUD 25 billion – is understandably fighting back.
Airbnb estimates that it contributes about USD 60 million in taxes to the state of New York, so it is not without influence on the issue.
The Hotel Association of New York City strongly supports the new law. Its chairman, Vijay Dandapani, issued a statement through the Share Better group: “This smart and innovative legislation will allow law enforcement agencies to better target, track, and penalise lawbreakers, while also protecting one of New York’s most vital economic contributors – the hotel and hospitality industry.”
Airbnb vented some of its angst on its blog, saying it has “worked together with cities around the world to collect and remit hotel, occupancy, and tourist taxes on behalf of our hosts and guests.
“All told, we’ve collected USD 85 million and the number of jurisdictions where we collect taxes continues to grow.
“Over the past several weeks we’ve finalized agreements with a number of cities and states in the United States and this summer we will be collecting taxes in jurisdictions up and down the Eastern Seaboard, including:
Airbnb says it is eager to add the City and State of New York to this list.
“According to New York state regulations, Airbnb does not have the authority to collect and remit taxes because of outdated laws designed for large hotels with teams of lawyers and accountants, not regular people who share the home in which they live,” Airbnb says.
“We’ve asked New York leaders to change this law and ensure we can deliver tens of millions of dollars in new tax revenue. Sadly, New York is going backwards and is instead considering wrongheaded legislation that would punish middle class families who depend on home sharing to pay the bills and stay in their homes.”
Sponsors of New York’s new law disagree, saying the law will send a strong message “that we prioritise hardworking New York families and affordable housing,” and will give authorities the tools they need to crack down on illegal hotels “that destabilise communities and deprive us of precious units of affordable housing”.
According to NBC News, other companies affected by the New York law include Expedia’s services HomeAway and VRBO.
Many other jurisdictions will be looking at New York’s new law to see how it works, with view to passing similar legislation.
Written by Peter Needham